Lundstrom, Inc. v. Nikkei Concerns, Inc.

• Decision Date: 17 August 1988
• Docket Number: No. 11403-8-II,11403-8-II
• Citation: 758 P.2d 561,52 Wn.App. 250
• Parties: LUNDSTROM, INC., a Washington corporation, Appellant, v. NIKKEI CONCERNS, INC., a non-profit Washington corporation f/k/a Issei Concerns, Inc., Respondent.
• Court: Washington Court of Appeals

Page 250

52 Wn.App. 250

758 P.2d 561

LUNDSTROM, INC., a Washington corporation, Appellant, v. NIKKEI CONCERNS, INC., a non-profit Washington corporation f/k/a Issei Concerns, Inc., Respondent.

No. 11403-8-II.

Court of Appeals of Washington,

Division 2.

Aug. 17, 1988.

James A. Krueger, James R. Verellen, Kane, Vandeberg, Hartinger & Walker, Tacoma, for appellant.

Warren J. Rheaume, Jr., Peter S. Ehrlichman, Foster, Pepper & Riviera, Seattle, for respondent.

REED, Chief Judge.

Lundstrom, Inc. appeals a directed verdict in favor of Nikkei Concerns, Inc. in Lundstrom's action to recover a real estate broker's commission on a transfer of Nikkei's property to the Pierce County Public Transportation Benefit Area Authority (Pierce Transit). The dispositive issue is whether the transaction was the equivalent of a condemnation. We hold that it was and affirm.

In May, 1984, Nikkei appointed Lundstrom as its agent with the right to sell a parcel of land in Pierce County. In the exclusive listing agreement, which expired September 21, 1984, Nikkei agreed that:

[I]n the event a sale is effected by [Lundstrom] or if [Lundstrom] produces a party who is ready, willing and able to purchase on the terms of this agreement, or as the same may be modified in writing by owner and broker, that [Nikkei] will pay broker a commission for services as follows: 7% of sale price. All cash at closing.

In another paragraph, Nikkei agreed that:

should a transaction in conformity with the terms hereof be pending at the expiration of the term of this agreement, or should such a transaction be completed within one year of the expiration of said term with any party to whom [Lundstrom or its agent] had exposed the subject property, this agreement shall extend to cover such transaction as if made pursuant hereto for the commission set out above.

In June, 1984, Pierce Transit sent Nikkei a letter with the subject heading "Procedures for Property Acquisition." This notice advised Nikkei that "Pierce Transit had selected your property as part of a parcel which is needed for the site of a new Maintenance and Operations Base. Pierce Transit will be purchasing your property with the assistance of federal funds...." Federal approval was required for the property acquisition, and made the acquisition date uncertain, but Pierce Transit explained:

[i]t is our intention to use the following procedure to purchase your property once the federal approval has been received:

1. A professional appraisal firm retained by Pierce Transit will call on you to arrange for an inspection of your property. You, or your designated representative, may accompany the appraiser if you wish.

2. A representative of Pierce Transit will then make an offer for the purchase of your property based upon the appraisal.

3. Upon agreement of a sale price, the representative will provide you with information on the relocation assistance which is available to you through Pierce Transit.

Mike Brewer, an associate broker with Lundstrom, learned of the Pierce Transit letter from the Nikkei's tenant, and Lundstrom notified Larry Yok, of Pierce Transit, that Lundstrom had the exclusive listing agreement for sale of the property. When Yok advised Lundstrom that Pierce Transit required written acknowledgment of a representative's authority to act on a property owner's behalf, Brewer explained this to Nikkei and drafted a letter for Nikkei to send to Pierce Transit. Nikkei revised the letter and returned it to Brewer, who forwarded it to Pierce Transit. In its final form, this letter stated:

At your request, we are sending this letter concerning our representative on the above property. Nikkei Concerns is under an exclusive listing agreement with Lundstrom, Inc., until September 21, 1984. Mr. Michael Brewer is the listing agent for sale of the above property. By that agreement, Mr. Brewer and his company would be the designated representative under the property acquisition procedures outlined in your letter of June 20, 1984.

Please contact Mr. Brewer, telephone 584-2000, for any further information on this property.

Brewer, who was not familiar with condemnation proceedings, contacted the Pierce Transit appraisers and showed the property to one of them. He regarded Pierce Transit as any other purchaser, and attempted to obtain a high appraisal for the sale, but he did not discuss the price or terms with Nikkei, because these were established in the listing agreement. When the agreement expired, Nikkei refused to extend it, and Brewer ceased his efforts.

Based on the appraisal, Pierce Transit offered Nikkei $400,000 on the property. Nikkei was dissatisfied with this offer, which was well below the $432,000 net proceeds it had hoped to realize from a sale of Mr. Lucky's, and sought its own appraisal. Meanwhile, Pierce Transit experienced serious difficulties in its negotiations with other property owners involved in the acquisition, and filed formal condemnation proceedings against all the property owners, including Nikkei. When Nikkei was able to document an appraised value of $425,000 for its property, Pierce Transit accepted this appraisal. The condemnation proceeding against Nikkei was settled for this amount, by a "Stipulation, Judgment, and Decree of Appropriation," filed July 18, 1985.

When Lundstrom learned of the settlement, it filed this action to recover a commission on the transaction. It based its claim solely on the listing agreement. Following Lundstrom's case-in-chief, Nikkei moved for a directed verdict, which the trial court granted. The court noted that the agreement was silent about a condemnation and should be construed against the drafter, Lundstrom. It held that the transaction was not a sale under the agreement's terms, because Nikkei was not a willing seller. Lundstrom appeals, arguing that it is entitled to a commission based on the extension provision in the agreement.

The rules for appellate review of an order directing verdict in favor of a party are well established: (1) evidence must be considered in favor of the nonmoving party; (2) no discretion is involved; and (3) the directed verdict will be upheld where there is no competent evidence, nor reasonable inferences arising therefrom, which would sustain a jury verdict in favor of the nonmoving party.

Oliver v. Pacific Northwest Bell Co., 106 Wash.2d 675, 678, 724 P.2d 1003 (1986). When an appeal requires an interpretation of an agreement creating parties' contractual rights, it presents a question of law, which this court...